Auto Insurance Black Box Technology To Meet Your Darkest Fears

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Back in the days before computers, auto insurance is a personal and subjective. Insurance agent actually talked to people he knew in the office, called in some favors and got their best customers fare. Male drivers under 25 were charged a lot. Young women, regarded as less risk, much less convicted.
Auto Insurance Black Box Technology To Meet Your Darkest Fears

Now, in the age of computers, auto insurance companies have a large database of accident and claims record. By the numbers of these records they can tell what type of person is more likely to be a good driver, and what types of people are more likely to be a risk of accidents. Technology 'black box' provides insight into their background and behavior of the people who they think should pay more for their auto insurance. For example, people who carry minimum limits of liability are actually at greater risk than those who carry at least 50/100 ($ 50,000 per person, $ 100,000 per accident). And statistics have shown that people with bad credit score is more likely to be involved in an accident.

In Texas, the minimum liability limits on auto insurance is 20/40. Yep. $ 20,000 per person, $ 40,000 per accident. Not much is it? And if that was not bad enough, a minimum of $ 15,000 in property damage. Guess who makes a difference if you are in an accident that is your fault?

In most states, auto insurance is regulated by the state. But that was just the beginning. The state uses the table 'loss ratio', exposure, and other conjuring words, to justify what auto insurance company wants you to pay. Every once in a while, just to throw you out, they will even announce a state-wide decline in auto prices. When they do so, hold onto your wallet!

After the state set a basic level, each company to negotiate with them to adjust certain level, claiming better or worse ratio than average losses. So, after the elections over, the legislature allows exceptions, amendments and support to jack them back to something auto insurance company can make a ton of money.

And there is more. Most states allow each company to establish its own rules to determine who will be charged nothing. So, one car insurance company a certain degree of driver one way, while the other companies the same rates of different drivers. Each company sets their underwriting rules.

So how auto insurance is determined? First, the state is usually involved. Then the company threw the dice between the intense competitions and make more profit they can for their shareholders. And finally, now that the 'black box' here, auto insurance companies take a closer look at every driver. Career, Credit Score, passing notes, even the city you live in to help 'drive' price. They even have found that those who choose a low limit of liability is a greater risk than those who choose a higher limit. Thus, by increasing the limits of your liability, you can actually reduce the level of your car insurance.

For some, the new technology 'black box' reducing prices by 20% over companies that do not use them. The bad news is, because credit rating plays a part in all of auto insurance rating, the worse your credit score, the higher the auto insurance you are going. No more 'discount', no more 'loyal customers' credit, and the like. You will be given the right to your clothes, placed in a group of drivers who almost identical with you, and wear.